Everyone's talking about it—because no one can avoid it—and it's causing even the longest-running and most venerable businesses to radically rethink how they operate. Economic, cultural, and technological conditions are changing so rapidly that entire industries are getting upended at an unprecedented rate. Faced with that kind of change, organizations typically find themselves in one of two positions: They're either disrupting their industries—changing the rules of the game, solving new problems, realizing new sources of value—or they're being disrupted by nimbler, more innovative, digitally native competitors.

Many people call the forces driving these trends "digital transformation." We should remember that any kind of transformation ("digital" or otherwise) never involves technologies alone. It also involves the people that use those technologies and the values that infuse how they do it. In fact, the ability to stake out and maintain a robust strategic advantage today depends on much more than technological superiority. An organization's culture—the principles that inform what we do and why we do it, along with the ways of working that stem from them—is a key source of competitive advantage, and it's becoming more important every day. Organizations hoping to manage disruption—to disrupt rather than be disrupted—will need to make sure they're building new cultural capabilities in addition to technical ones.

The challenge, however, is that most of our organizations are still operating according to principles from a bygone era. Conventional organizations born in industrial contexts tend to value ideals like compliance, predictability, and efficiency. And their devotion to those principles gets reflected everywhere—from the ways they set their goals, to the ways they train their leaders, to the ways they structure their organizational charts, to the ways they reward certain employee behaviors rather than others. They're organized for those values.

We should remember that any kind of transformation ("digital" or otherwise) never involves technologies alone.

Unfortunately, those values aren't central to driving success today. Most of what those industrial-era organizations did or produced has been automated or commoditized, so the ability to make the same things faster or cheaper isn't as important as it once was. Today, what's far more important is what an organization and its people can do with the resources they have—what they enable and what they help others create or solve. That kind of capability requires a different sort of work altogether. Really, it requires rethinking the way we work—how we organize, what we value, what kinds of behaviors we encourage or discourage. And to do that, we need to fundamentally redesign our organizational structures and strategies. We need to organize for innovation.

Three years ago, I wrote The Open Organization, a book about how Red Hat, the company where I'm president and CEO, does this. We do it by leveraging the same principles that power the open source software communities all over the world that are generating new innovations at lightning speed. We've imbued those principles— such as transparency, meritocracy, community, collaboration, and sharing—into our organizational culture. We've also taken great care to foster them in our behaviors and decisions because we believe those principles are the foundation of an organization optimized for innovation.

The Open Organization was largely a descriptive book, not a management text (I'm neither a professor nor a theorist!). But since I've written the book, I've engaged in countless conversations with the community that emerged around the ideas in it. Those conversations have helped me see more clearly the technological, social, and economic tectonic plates that are shifting all around us—and changing the business landscape as a result.

And that's what this book is about. It collects some key lessons I've learned—not only about open organizations and open culture, but also about the ways we can lead more openly during times of uncertainty and flux. As you read the pages that follow, I hope you'll keep a few core questions in mind: What are the principles driving the way your organization operates? And are those principles the ones best suited to helping you solve the problems you're facing?

If not, then the first organization you'll need to disrupt may be your own.

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About the author

Jim Whitehurst - Jim Whitehurst is President and Chief Executive Officer of Red Hat, the world’s leading provider of open source enterprise IT products and services. With a background in business development, finance, and global operations, Whitehurst has proven expertise in helping companies flourish—even in the most challenging economic and business environments. Since joining Red Hat in 2008, Whitehurst has grown the company, and its influence on a variety of industries, by reaching key milestones—the most...

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